HomeMy WebLinkAboutItem 3C: Resolution authorizing EWEB Water Bonds
ECC
UGENE ITY OUNCIL
AIS
GENDA TEM UMMARY
Adoption of Resolution 4935 Authorizing the Issuance and Sale of Water Utility System
Revenue Bonds in the Aggregate Principal Amount of Not To Exceed Fifteen Million
Five Hundred Ninety-Five Thousand Dollars ($15,595,000) for the Purpose of Financing
Certain Capital Improvements to the Water Utility System and Providing for Certain
Details and Related Matters
Meeting Date: April 14, 2008 Agenda Item Number: 3C
Department: Central Services Staff Contact: Sue Cutsogeorge
www.eugene-or.gov Contact Telephone Number: 682-5589
ISSUE STATEMENT
EWEB is requesting authority to proceed with the issuance of Water Utility System Revenue Bonds in
the amount of $15,595,000, for the purposes described below.
BACKGROUND
On September 13, 1999, the council adopted Resolution No. 4601 authorizing the issuance and sale of
Water System Revenue Bonds in aggregate amount not to exceed $36 million for acquisition of real and
personal property, to develop, construct, equip, and improve the water system. Of this amount,
$21,405,000 has been issued to date. This resolution sets terms and conditions by which the council
would authorize the issuance of the $14,595,000 remaining under this authorization. The bonds will be
used to finance water utility capital improvements, including the Hayden Bridge filtration expansion, a
water main replacement and other projects.
On April 8, 2002, the council adopted Resolution No. 4712 authorizing the issuance and sale of Water
System Revenue Bonds in an amount not to exceed $11,000,000 for development, construction and
improvement of a ground water backup supply system. Of this amount, $10,000,000 has been issued to
date. This resolution sets out terms and conditions by which the council would authorize the issuance of
$1 million remaining under this authorization. The bonds would be used to finance water utility capital
improvements.
With these two previously adopted resolutions, a total of $15,595,000 of authorization is remaining.
EWEB is requesting authority to proceed in the issuance of $15,595,000 of Water Utility System
Revenue Bonds.
The debt service costs for these bonds were included in the costs contributing to the 17% rate increase
approved in March.
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RELATED CITY POLICIES
There are no policies related to this item.
COUNCIL OPTIONS
The council can approve or not approve this resolution. If the council does not approve the resolution,
EWEB would not be able to issue revenue bonds to complete its capital improvements.
CITY MANAGER’S RECOMMENDATION
The City Manager recommends approval of the resolution.
SUGGESTED MOTION
Move to adopt Resolution 4935 authorizing the issuance and sale of water utility system revenue bonds
in the aggregate principal amount of not to exceed fifteen million five hundred ninety-five thousand
dollars ($15,595,000) for the purpose of financing certain capital improvements to the water utility
system and providing for certain details and related matters.
ATTACHMENTS
A. Resolution
FOR MORE INFORMATION
Staff Contact: Sue Cutsogeorge
Telephone: 682-5589
Staff E-Mail: Sue.L.Cutsogeorge@ci.eugene.or.us
EWEB Contact: Cathy Bloom
Telephone: 344-6311 ext. 3277
E-Mail: Cathy.Bloom@eweb.eugene.or.us
F:\CMO\2008 Council Agendas\M080414\S0804143C.doc
ATTACHMENT A
RESOLUTION NO. ____
A RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF WATER UTILITY
SYSTEM REVENUE BONDS IN THE AGGREGATE PRINCIPAL AMOUNT OF NOT
TO EXCEED FIFTEEN MILLION FIVE HUNDRED NINETY-FIVE THOUSAND
DOLLARS ($15,595,000) FOR THE PURPOSE OF FINANCING CERTAIN
CAPITAL IMPROVEMENTS TO THE WATER UTILITY SYSTEM AND PROVIDING
FOR CERTAIN DETAILS AND RELATED MATTERS
The City Council of the City of Eugene finds that:
A.On September 13, 1999, the City Council adopted Resolution No. 4601 to authorize the
City of Eugene (the “City”), acting through the Eugene Water & Electric Board
(“EWEB”), to issue water utility system revenue bonds in an aggregate principal amount
of not to exceed $36,000,000, for the purpose of providing funds for the acquisition of
real and personal property, to develop, construct, equip and improve the City’s water
utility system (the “Water Utility System”) which is operated by EWEB, and all
equipment and appurtenances necessary, useful or convenient thereto (the “2000
Project”), and on September 19, 1999, there was published the Notice of Revenue Bond
Authorization in The Register-Guard, a newspaper of general circulation within the
geographical boundaries of the City and sixty (60) days elapsed since the publication of
such Notice of Revenue Bond Authorization and no voters residing within the
geographical boundaries of the City filed a petition with the City asking to have the
question whether to issue the water utility system revenue bonds referred to a vote (the
“1999 URBA Authorization”).
B.Pursuant to the 1999 URBA Authorization, the City, acting by and through EWEB,
issued its City of Eugene, Oregon, Water Utility System Revenue Bonds, Series 2000, in
the original aggregate principal amount of $21,405,000 (the “Series 2000 Bonds”).
C.On April 8, 2002, the City Council adopted Resolution No. 4712 to authorize the City,
acting through EWEB, to issue water utility system revenue bonds in an aggregate
principal amount of not to exceed $11,000,000, for the purpose of providing funds for the
development, construction and improvement of a ground water backup supply system
(the “2002 Project”) as part of a long-term water supply plan approved by EWEB to
improve and expand the Water Utility System, and on April 16, 2002, there was
published the Notice of Revenue Bond Authorization in The Register-Guard, a
newspaper of general circulation within the geographical boundaries of the City and sixty
(60) days elapsed since the publication of such Notice of Revenue Bond Authorization
and no voters residing within the geographical boundaries of the City filed a petition with
the City asking to have the question whether to issue the water utility system revenue
bonds referred to a vote (the “2002 URBA Authorization”).
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D.Pursuant to the 2002 URBA Authorization, the City, acting by and through EWEB,
issued its City of Eugene, Oregon, Water Utility System Revenue Bonds, Series 2002, in
the original aggregate principal amount of $10,000,000 (the “Series 2002 Bonds”).
E.Following the issuance of the Series 2000 Bonds and the Series 2002 Bonds, there
remained unissued under the 1999 URBA Authorization and the 2002 URBA
Authorization, respectively, $14,595,000 and $1,000,000 of authorized water utility
system revenue bonds.
F.EWEB has requested the City Council to adopt this Resolution authorizing and setting
the terms for the issuance and sale of not to exceed $15,595,000 in aggregate principal
amount of water utility system revenue bonds (the “Bonds”) for the purpose of financing
the design, construction, installation and equipping of certain capital improvements,
including related acquisitions of land, in order to improve the storage and delivery
capacities of the Water Utility System which constitute Project purposes under the 2000
URBA Authorization and the 2002 URBA Authorization (collectively, the “2008
Improvement Program”), to fund necessary reserves for the Bonds and to pay the costs of
issuance of the Bonds.
G.EWEB, by resolution, has undertaken to cause to be prepared a plan showing that
EWEB’s estimated Water Utility System revenues are sufficient to pay the estimated debt
service on the Bonds authorized by this Resolution.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF EUGENE, A
MUNICIPAL CORPORATION OF THE STATE OF OREGON AS FOLLOWS:
Section 1.
Authorization of Bonds; Purpose of Issue; Conditions of Issuance. Based
on the above findings, the Council hereby authorizes EWEB, on behalf of the City, to issue and
sell the Bonds designated as the “City of Eugene, Oregon Water Utility System Revenue Bonds,”
in one or more series, in an aggregate principal amount not to exceed $15,595,000, subject to the
following terms and conditions prescribed by the City Council:The Bonds shall: (i) mature not
later than thirty (30) years from the date of issuance thereof; (ii) be sold through public
competitive sale and awarded to the bidder offering the most favorable terms to EWEB, on
behalf of the City, or sold pursuant to negotiation at par or with a net original issue discount or
premium that does not exceed five percent (5%) of the aggregate principal amount thereof;
(iii) have an effective interest rate of not to exceed seven percent (7.00%) per annum; and
(iv) not exceed $15,595,000 in aggregate principal amount.
(b)The proceeds of the Bonds shall be used only for the following purposes:
to finance of the 2008 Improvement Program, to fund necessary reserves for the Bonds and to
pay the costs of issuance of the Bonds.
Section 2.
Delegation of Authority for Terms of Bonds; Provisions for Issuance.
Pursuant to §§48-49 of Chapter 783 Oregon Laws 2007, EWEB, or any individual designated by
EWEB, is hereby authorized and directed to determine, with respect to the Bonds, the form of
bond and series designation, the manner of disbursement of proceeds of the Bonds, the maturity
dates, principal amounts, redemption provisions, interest rates or the method for determining a
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variable or adjustable interest rate, denominations, form and authorized signatory and other terms
and conditions of the Bonds because the same cannot be determined by the Council at this time.
Prior to the issuance of the Bonds, EWEB shall: (i) prepare a plan showing that the estimated
Water Utility System revenues are sufficient to pay the estimated debt service on the Bonds;
(ii) adopt a bond resolution and provide a copy of such resolution to the City; and (iii) provide to
the City a resolution determining that any and all acts, conditions and things required to exist, to
happen and to be performed precedent to and in the issuance of the Bonds, exist, have happened
and have been performed in due time, form and manner as required by the Constitution and
statutes of the State of Oregon, the Charter of the City of Eugene and this Resolution.
Section 3.
Declaring Intent To Reimburse. The City reasonably anticipates that the
City and EWEB may incur preliminary, cost of issuance and other project expenditures that
qualify as “Original Expenditures” under Treasury Regulation §1.150-2 prior to the date of
issuance of the Bonds, and hereby declares its official intent to reimburse itself or EWEB with
proceeds of the sale of the Bonds to be issued in an amount not to exceed $15,595,000 in
aggregate principal amount.Statement on Form of Bond. All Bonds shall include a statement on
their face to the effect:
(a)That they do not in any manner constitute a general obligation of EWEB
or of the City, or create a charge upon the tax revenues of the City, or upon any other revenues or
property of the City, or property of EWEB, but are charges upon and are payable solely from the
revenues of the Water Utility System operated by EWEB, or any portion thereof, pledged to the
payment thereof; and
(b)That the holders thereof may look for repayment only to the revenues of
the Water Utility System which are pledged for the payment thereof, and may not directly or
indirectly be paid or compensated through the property of the City, or EWEB, or by or through
the taxing power of the City.
Section 5.
Bonds Payable Solely from Revenues. The Bonds shall not be general
obligations of the City, nor a charge upon its tax revenues, but shall be payable solely from the
revenues and funds which EWEB pledges to the payment thereof pursuant to the provisions of
§46 of Chapter 783 Oregon Laws 2007, the 1999 URBA Authorization, the 2002 URBA
Authorization, City Council Resolution 4601, City Council Resolution 4712 and in accordance
with this Resolution.
Section 6.
Bonds Reporting. EWEB shall submit to the City by May 1 of each year
the following annual reports commencing after the first sale of any Bonds or other evidences of
indebtedness hereunder and each year thereafter until the Bonds have been paid and retired:
(a)A report on the funds for each series of Bonds describing the funds
established, the amounts in each fund, expenditure from each fund, the manner in which the
monies in each fund have been invested, the income from such investments and the application
of such income; and
(b)A report on Bond payments describing amounts paid and amounts
scheduled to be paid and the source of such payments.
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If the contents of the reports required by subsections (a) and (b) above are included in the
yearly audit report of EWEB, then EWEB may comply with this Section 6 by transmitting a
copy of its yearly audit report to the City.
Section 7.
Appointment of Professionals. EWEB is authorized to appoint bond
counsel, disclosure counsel, financial advisors, a registrar, paying agent and escrow agent and
any other professional assistance that EWEB determines is necessary or convenient to
accomplish the issuance and sale of any or all of the Bonds.
Section 8.
Official Statement; Sale Documents. EWEB or any party designated by
EWEB is authorized to prepare and distribute or direct the preparation and distribution of one or
more preliminary official statement(s) or other disclosure document(s) for any of the Bonds or in
connection with a preliminary official statement or other disclosure document for any other
bonds, as determined to be necessary by EWEB, to obtain bond insurance or other credit
enhancement or commitments therefor, if required, to obtain a rating on any or all of the Bonds
from Moody’s Investors Service, Inc., Standard & Poor’s and/or Fitch Ratings, if required, and
to issue and publish such notices of sale of the Bonds as may be necessary or required to
accomplish the sale of the Bonds in accordance with this Resolution.
Section 9.
Election to Issue Bonds under URBA. Pursuant to Oregon Administrative
Rule 170-061-0200 which implements the provisions of Chapter 783 Oregon Laws 2007,
EWEB, on behalf of the City, may elect in writing to issue the Bonds under the URBA
provisions, without regard to the provisions of Chapter 783 Oregon Laws 2007, upon satisfaction
of the requirements set forth in such Oregon Administrative Rule. If the Bonds are issued under
the URBA provisions, all references to the provisions of Chapter 783 Oregon Laws 2007
contained herein shall be deemed to refer to such applicable statutes of similar purpose contained
in URBA.
Section 10.
Effective Date of Resolution. This Resolution shall become effective
immediately upon its adoption.
The foregoing Resolution adopted by the City Council this ___ day of April, 2008.
City Recorder
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